Human Resources MagazineHuman Resources Magazine

    Subscribe to Updates

    Get the latest Human Resources news and updates from around the world.

    What's Hot

    Ethnicity pay gap persists regardless of high company pay levels

    August 10, 2022

    Tip for tat: hotel company offers tattoo incentives to workers

    August 10, 2022

    Catch up: Where do you draw the line with social media screening?

    August 10, 2022
    Facebook Twitter Instagram
    • Advertise
    • Privacy Policy
    • Terms
    • Contact
    Facebook Twitter Instagram
    Thursday, August 11
    Human Resources MagazineHuman Resources Magazine
    Demo
    • Home
    • News
    • Boardroom
    • HR Careers
    • Leadership
    • Human Capital
    • Recruitment
    • HR Software
    • Culture
    • Tech
    Human Resources MagazineHuman Resources Magazine
    Home » Women’s pension gap worsens with age
    News

    Women’s pension gap worsens with age

    June 28, 2022No Comments4 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr
    Share
    Facebook Twitter LinkedIn Pinterest Email


    New data from Legal & General has revealed the pensions gap for women in their 20s is still 16% – an improvement of just one percentage point since 2020.

    The gap also gets larger for every decade women are in work. 

    By their 30s, women’s pension pots are 17% smaller than men’s, which increased to 31% by their 40s; 51% by their 50s, and 55% by the time they retire. 


    Gender pension gaps in the workplace:

    UK women hit by gender pension gap at every stage of their career

    Closing the gender pension gap: What can employers do?

    UK minister for pensions promises reform


    Although the pension gap did improve the most amongst women in their 40s in 2021 (improving from 34% in 2020 to 31% in 2021), by the end of womens’ careers, the gender pension gap had only improved by one percentage point (55% in 2021 vs 56% in 2020).

    The insurance firm has called on employers to redouble their efforts to help reduce the gender pension gap by tackling common contributing factors such as lower pay; the fact that women face a caregiver penalty and the effect time out of the workplace to raise a family has on earnings.

    Sue Ferns, deputy director of trade union Prospect said the results are unsurprising, and suggested companies start tracking their gender pension gap.

    Speaking to HR magazine, she said: “Progress is being made far too slowly, and we need the government to start making this a priority.

    “In the same way there is mandatory reporting on gender pay gap reporting, it should look at making gender pension gap reporting compulsory too.

    “It may not solve the issue, but it at least draws attention to the problem, and employers cannot know what to do unless they know their own gender pension gap.”

    Rachel Meadows, consulting director, and head of proposition pensions & savings at Broadgate said communication is also key for employers.

    Speaking to HR magazine she said: “Even though this is a complex problem, the simplest thing employers can do is give women more of the right information at the right time.

    “When women put in requests to reduce their hours, there should be a process in place that will automatically signpost her to a pensions guidance meeting first.

    “It’s often the case that women do not know the impact a change to their working time could have on their future pension.”

    Financial education around using salary exchange to pay for their pension contributions (which could then mean they are eligible for childcare tax credits) could also help she said.

    She added: “Women are typically more risk averse, and are more cautious than men, so better financial education matters.”

    One thing that will be challenging however is encouraging staff to increase their own pension contributions – especially at a time of high inflation.

    “Expecting staff to carry the burden of reducing the gap is not what we would recommend,” Georgie Burks, head of customer insight at Penfold told HR magazine.

    “We’d suggest HRDs look at contribution levels, and survey teams to understand the appetite for pension savings. Then they should explore whether a matched contribution approach might make sense.”

    Changes to the NHS’s pension scheme tiers – coming into effect this October – have been criticised precisely for reducing take-home pay. A tier 3 worker (on between £22-26,000) will see their pension contribution rise from 7.7% to 8.3%. 

    “Asking women to put away more is a tough ask right now,” said Meadows.

    Ferns added: “Employers should encourage staff if they’re able to.” 

    Data by WEALTH at Work finds that if women save an extra 1% a year, matched by their employer, it is possible to boost a retirement pension pot by 25%. 

    Nest also finds that the average pension pot for women is £29,000 smaller for women, but if women save an extra £2.50 per week, they could grow their pot by an extra £13,600 by the time they retire. 

    Last month the TUC said the government should scrap the lower earnings limit and remove the £10,000 earnings threshold for automatic pensions enrolment. It also wants higher minimum employer contributions.

    According to the 2022 Drewberry Workplace Pension Survey, 58% of employees wanted their employer to offer more than the legal minimum contribution.

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Articles

    Ethnicity pay gap persists regardless of high company pay levels

    August 10, 2022

    Tip for tat: hotel company offers tattoo incentives to workers

    August 10, 2022

    High-earner pay rises threaten inflation spiral

    August 9, 2022

    “Pushy” solicitor wins unfair dismissal tribunal

    August 9, 2022

    Economic instability prompts recruitment caution

    August 8, 2022

    More than a million key worker children to reach poverty in 2023

    August 5, 2022
    Add A Comment

    Leave A Reply Cancel Reply

    Don't Miss
    News

    Tip for tat: hotel company offers tattoo incentives to workers

    By Press RoomAugust 10, 2022

    Hotel chain Ruby Hotels has offered its employees money towards getting tattoos as an…

    Catch up: Where do you draw the line with social media screening?

    August 10, 2022

    High-earner pay rises threaten inflation spiral

    August 9, 2022

    “Pushy” solicitor wins unfair dismissal tribunal

    August 9, 2022

    Subscribe to Updates

    Get the latest Human Resources news and updates from around the world.

    Our Picks

    Too many businesses still hiding behind green PR

    August 9, 2022

    How to overcome post-pandemic HR sourcing challenges

    August 8, 2022

    How HR can prioritise procedure using automation and digital processes

    August 8, 2022

    Demand for fully remote roles spikes

    August 8, 2022
    About Us
    About Us

    Human Resources Magazine is a dedicated news portal about Human Resources and all that matters to emplyees and leaders in the business section.

    Our Picks

    Ethnicity pay gap persists regardless of high company pay levels

    August 10, 2022

    Tip for tat: hotel company offers tattoo incentives to workers

    August 10, 2022

    Catch up: Where do you draw the line with social media screening?

    August 10, 2022
    Trending Now

    Leaders of colour undermined by positive discrimination

    July 6, 2022

    HR technology key to HR’s work through the pandemic

    March 28, 2022

    Fit note update modernises sick leave

    July 4, 2022
    Facebook Twitter Instagram Pinterest
    • Home
    • Privacy Policy
    • Terms and Conditions
    • Contact
    © 2022 Human Resources Magazine. All rights reserved.

    Type above and press Enter to search. Press Esc to cancel.